Matt Ott
Associated Press
WASHINGTON - Average Long term U.S. mortgage rates jumped by more than a quarter-point this week to their highest level since 2007 as the Federal Reserve intensified its efforts to tamp down decades-high inflation and cool the economy.
Mortgage buyer Freddie Mac reported Thursday that the 30-year rate climbed to 6.29%, from 6.02% last week. That's the highest it's been since the housing market triggered the Great Recession.
Rapidly rising mortgage rates threaten to sideline even more homebuyers after more than doubling in 2022. Last year, prospective homebuyers were looking at rates well below 3%.
On Wednesday, the Federal Reserve bumped its benchmark borrowing rate by another three-quarters of a point in an effort to constrain the economy, its fifth increase this year and third consecutive 0.75 percentage point increase. Perhaps nowhere else in the effect of the Fed's action more apparent than the housing sector. Existing home sales have been in decline for seven straight months as the rising cost to borrow money puts homes out of reach for more people.
The National Association of Realtors said Wednesday that existing home sells fell 0.4% last month from July to a seasonally adjusted annual rate of 4.80 million.
Sales fell 19.9% from August last year, and now at the slowest annual pace sine May 2020, early in the pandemic.
The national median home price jumped 7.7% in August from a year earlier to $389,500. As the housing market has cooled, home prices have been prices have been rising at a more moderate pace after surging annually by around 20% earlier this year. Before the pandemic, the median home price was rising about 5% a year.